Legislative reforms for development

While the nation is pre-occupied with Senate President Bukola Saraki’s matter before the Code of Conduct Tribunal (CCB), something important is going on at the National Assembly, which, if allowed to succeed, may prove to be the former Kwara State Governor’s enduring legacy.

There are many important legislative proposals which are critical to Nigeria’s economic development which have been stuck in the National Assembly since 2007 or in some cases perhaps even earlier. Some of these bills include laws to reform the transport sector including to establish a roads authority and roads funds; set up a transport regulatory commission; establish a ports and harbours authority; reform the rail sector; revise laws establishing the National Inland Waterways Authority; and inaugurate a postal regulatory commission. The bills also include a very important law to establish a competition and consumer protection agency. Nigeria is one of the few large economies in the world that does not have a clear competition law and policy, even though we have been deregulating economic sectors, liberalizing hitherto restricted industries, and privatising government owned monopolies and state-owned enterprises for almost three decades!

There is no sensible rationale behind an economy voting to end government monopolies in its economy through deregulation, liberalization, privatization and/or commercialization, and then opting to encourage or allow private sector controlled monopolies in their place! While all monopolies may be bad, private sector monopolies are certainly worse-at least a theoretical case may be made for government-owned firms in a monopolistic market since government is supposed (and this is where the government case breaks down because the supposition often does not hold anywhere in the world and is usually completely untenable in Nigeria!) to act in the public interest; but allowing private businesses to achieve monopoly status in an economy has no redeeming features! There is a long and growing list of uncompetitive sectors with at least a prima facie case of monopolistic, duopolistic or oligopolistic industry structures across the Nigerian economy. Popular examples which everyone refers to include cement, cable television, sugar and telecommunications amongst others.

The poor in particular pay a high price for anticompetitive markets with global research suggesting that prices fall by as much as 25-50 percent when regulated and uncompetitive sectors become more competitive! Reforms in transport and infrastructure (such as to clarify roles and conflicts between the mandates of the Infrastructure Concession and Regulatory Commission (ICRC), Bureau of Public Enterprises (BPE) and Bureau of Public Procurement (BPP) could spur private sector investment in infrastructure creating jobs and stimulating economic growth. A constitutional amendment to remove the Land Use Act from the 1999 Constitution would open up reforms to land use and conveyancing law and practice and ease problems of land titling and access to property for both big businesses and MSMEs. Laws to facilitate use of chattels and warehousing receipts as collateral for lending would improve access to finance for micro and small businesses across the country. Updating arbitration and ADR laws and practices would improve contract enforcement and dispute resolution and improve business and commerce in Nigeria. Laws and regulatory reforms to improve Nigeria’s investment climate and competitiveness, and enhance the country’s rating on the World Bank Doing Business rankings will transform the business environment. Nigeria’s main Companies and Allied Matters Act was enacted in 1990, over twenty five years ago and even our Investment and Securities Act is in need of certain reforms.

The point, in summary, is that there is a legislative dimension to Nigeria’s economic reform and development and Senator Saraki appears from the outset to have recognized that link.

In November 2015, the Senate President engaged with DFID on a process to identify such laws that could serve as a catalyst for economic development. DFID (which is the United Kingdom’s Department for International Development, also known as UK AID) engaged a first-class legal team led by Professor Paul Idornigie SAN to lead the law review effort and that team came up with a very comprehensive report. I had the privilege of moderating a peer review session in which a Nigerian Bar Association-Section on Business Law (NBA-SBL) team led by its Secretary, Seni Adio and participants from the Nigerian Economic Summit Group (NESG) including its CEO Laoye Jaiyeola, Ibukun Awosika, Nnana Ude, Ayo Gbeleyi and Emeka Nduamongs others as well as representatives from the academia and media such as Professor Wale Ajai and Kunle Aderinokun reviewed and made inputs to the Idornigie team’s report. This process culminated in a presentation of the report on February 29, 2016 to a high-powered National Assembly team led by the Senate President, his deputy Ike Ekweremadu, both the Senate Leader and his deputy and representatives of the House Speaker Yakubu Dogara. It was gratifying to listen as Saraki, Ekweremadu, the Speaker’s representative, and virtually all the legislators present communicated understanding of the critical role of these and other legislative proposals in transforming Nigeria’s business environment. The Minister of State for Trade and Investment was also present affirming the potential for executive-legislative collaboration in this important endeavor.

The Senate President’s vision is apparently to create an institutional mechanism, a Business Environment Roundtable in which all key stakeholders, especially from the legislature, business, executive and regulatory institutions could engage on proposals, strategies and initiatives to improve the business environment towards economic growth, employment generation and poverty reduction. The inaugural roundtable is planned for Monday March 21, 2016.

Opeyemi Agbaje